McKinsey’s 2026 analysis of the automotive software and electronics market states that the share of the market addressable by artificial intelligence could rise from 59% in 2025 to 78% by 2035. The report identifies advanced driver assistance systems and in-vehicle infotainment as the strongest application areas, both reaching 95% addressability within that decade.McKinsey says AI could handle most of the software in cars by 2035, changing how drivers interact with their vehicles.McKinsey’s 2026 analysis indicates a structural shift in automotive value chains, with AI addressability in software potentially rising to 78% by 2035.
The claim
The automotive industry is increasingly shifting competitive differentiation to software. As software-defined vehicles become more mainstream, in-vehicle personalization is evolving from a convenience feature into a defining characteristic of the ownership experience. AI enables these vehicles to move beyond the automation of isolated functions, allowing them to understand driver behavior and interpret context.
The response
The source material does not provide counterarguments or skepticism regarding this transition. It notes that traditional personalization involved storing basic preferences like seat position and climate settings, whereas new AI-driven approaches dynamically learn from driving behavior, routes, and charging habits.
The practical upshot
AI enables multiple systems to work together within connected software ecosystems. Before a journey begins, the vehicle can proactively plan the optimal route based on live traffic, precondition the cabin, and recommend a charging stop. This integration allows navigation, climate control, battery management, and infotainment to deliver a seamless experience without requiring multiple manual inputs.
Claims versus evidence
McKinsey provides specific market share projections for AI addressability, citing a potential rise to 78% by 2035 and 95% for ADAS and infotainment. The evidence for functional claims relies on descriptive scenarios of what AI enables, such as learning charging habits and orchestrating cabin preconditioning. The source acknowledges that personalization is no longer limited to individual features but extends to connected software ecosystems. No independent validation of these specific market figures or technical implementations is provided in the material.
Why it matters
- Product teams must prioritize software integration over isolated hardware features to meet the projected 78% AI addressability in automotive markets.
- Infotainment and ADAS systems offer the highest immediate opportunity for AI implementation, with 95% addressability cited for 2035.
- Personalization strategies need to shift from static user profiles to dynamic, behavior-based learning models to remain competitive.
- Development roadmaps should focus on cross-system orchestration, allowing navigation, climate, and battery management to interact proactively.
Topics: automotive, AI, software-defined vehicles, McKinsey, infotainment
Updated
Then / now / next
Vehicle personalization was limited to storing basic driver preferences like seat position and mirror angles.
AI enables software-defined vehicles to dynamically learn from behavior and orchestrate multiple systems for proactive experiences.
The automotive software market share addressable by AI is projected to reach 78% by 2035.
Story timeline
- Then Vehicle personalization was limited to storing basic driver preferences like seat position and mirror angles.
- Now AI enables software-defined vehicles to dynamically learn from behavior and orchestrate multiple systems for proactive experiences.
- Next The automotive software market share addressable by AI is projected to reach 78% by 2035.
Numbers in context
Circle area is proportional to the magnitude; labels retain signs. Figures may describe different measures. Read their contexts above.Did this article give you the evidence you needed?
Your choice stays on this device. No public tally.Terms in this story
Software-defined vehicles
Vehicles where functionality and features are primarily defined by software rather than hardware.
ADAS
Advanced Driver Assistance Systems that use technology to assist drivers in safety and operation.
Infotainment
In-vehicle systems combining information and entertainment, including navigation and media controls.
Questions readers ask
What percentage of the automotive software market could be addressable by AI in 2035?
McKinsey projects that the share addressable by AI could rise to 78% by 2035.
Which automotive applications have the highest AI addressability?
Advanced driver assistance systems and in-vehicle infotainment both have 95% addressability by 2035 according to the analysis.
How does AI change vehicle personalization?
AI enables vehicles to dynamically learn from driving behavior and habits, moving beyond static storage of seat and climate preferences.
Connected stories
Reading receipt
- McKinsey projects the AI-addressable automotive software market could rise from 59% in 2025 to 78% by 2035.
- Advanced driver assistance and infotainment systems are cited as having 95% AI addressability by 2035.
- Software-defined vehicles are evolving to allow AI to understand driver behavior and interpret context.
Still open: How will automakers handle data privacy concerns as vehicles learn from driver behavior and habits?
Still open: What specific technical barriers might prevent the projected 95% AI addressability in ADAS and infotainment?